|Over-concentration is when a financial advisor or broker recommends placing a significant portion of your investment portfolio into a single asset class or type of investment. it is a failure to diversify and a violation of the requirements of brokers and financial advisors in making recommendations. As a rule of thumb, not more than 20% of an investor’s assets should be in a single type of investment.
Such recommendations may not result in losses for years, until a shift in market forces, or a hidden defect of the investment reveals itself.
The failure to diversify in is often connected to other violations, and will often reveal other problems with the sale of the investment. Often, the broker or financial advisor will violate other rules such as breach of fiduciary duty. For example, over-concentrating the investor’s portfolio may occur he or she receives a higher commission for a certain type of investment. Failure to properly diversify an investment portfolio may also be related to professional negligence, and fraud, for failing to disclose material facts.
If you have significant losses, please contact Attorney Daniel A. Bakondi, Esq. today for an assessment of your options and investment loss recovery strategies.
Attorney Daniel A. Bakondi, Esq.
The Law Office of Daniel Bakondi
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